Fuel queues appeared in some parts of Lagos on Monday evening as Nigerians rushed to fill their tanks in reaction to a declaration that there will be no fuel subsidy.
Nigeria’s new president, Bola Ahmed Tinubu stated in his inauguration speech on Monday, May 29th that the controversial fuel subsidy was not budgeted for by the Buhari administration and as such it will be removed.
However, checks by Nairametrics reveal queues appeared in several parts of Lagos shortly after the speech as they expected an increase in fuel prices.
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Some social media posts reveal some stations sold petrol at about N600 per liter over 3x the official pump price of N185/ ltr.
Nothing less than N450 per liter
Reacting to the declaration of fuel subsidy removal by President Tinubu yesterday, oil and gas analyst, Dan D. Kunle, told Nairametrics that petrol stockholders will want to maximize the opportunity that the president’s statement provides.
According to him, some stations will refuse to sell petrol while waiting for the price to skyrocket and demand to increase, before selling at up to N450 to N500 per liter. As is the culture in Nigeria, there will always be people willing to buy at increased prices.
Dan Kunle said that in the next couple of weeks, Nigerians should expect the fuel prices to keep fluctuating but they should not expect to buy at less than N450 per liter. This is because of the vagaries associated with the international crude oil price as Nigeria keeps importing petroleum products.
After that, when the Dangote refinery becomes active and is supplying the country, market forces will bring out the real price of petrol.
However, some Lagos residents have said that Pinnacle Oil is still selling at the normal pump price of N185 per liter.
The pushback
Meanwhile, the National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria (IPMAN) Chief Ukadike Chinedu has said that the new government should dialogue with marketers before taking the decision to remove subsidy. Punch reports that the IPMAN executive said:
- “We are not in support of the removal of fuel subsidy at this time. We have said it repeatedly that our refineries should be fixed before taking such a decision that will cause galloping inflation and inflict more hardship on the masses.
- “Rather the new government should sit and discuss with marketers and other stakeholders on how to manage the fuel subsidy regime. We now have the Dangote Refinery, but all our refineries are still not working, so we don’t think removing subsidy is the right thing to do now.”
